The United States Court of Appeals for the District of Columbia Circuit, in a securities case, affirmed the refusal of a District Court to vacate an arbitration award. Appellant conceded that none of the four bases for vacating an award articulated by the Federal Arbitration Act were present, but contended that the award should be vacated nevertheless because the award was “in manifest disregard of the law.” The Court described this standard as requiring that a panel ignore well defined, explicit law that was clearly applicable to the case, and that decisions based upon debatable points of law and disputed issues of fact did not satisfy this standard. Kurke v. Oscar Gruss and Son, Inc., Case No. 05-7018 (D.C. Cir. July 18, 2006).
Arbitration / Court Decisions
Motion to vacate arbitration award rejected as untimely
In an unreported opinion (not available on PACER) not involving reinsurance, the Second Circuit affirmed the rejection of a motion to vacate an arbitration award, where the motion was served within the three month period required by the Federal Arbitration Act (“FAA”) for service of such a motion, but was filed one day after the 90 day period expired for filing such a motion under applicable New York law. The Court found that since the FAA contained a service deadline, but not a filing deadline, it was appropriate to apply the filing deadline contained in New York state law, illustrating the importance of being cognizant of both service and filing deadlines. Hakala v. J. P. Morgan Securities, Inc., Case No. 05-3140 (2d Cir. June 21, 2006).
Summary judgment for reinsurer affirmed in collateral assignment case
A Florida Court of Appeal has affirmed a summary judgment in favor of a reinsurer arising out of the partial assignment of the underlying insurance policy as security for a loan, where the reinsurer paid the insured $8 million for a fire loss, ignoring the recorded assignment. Banco Ficohsa v. Aseguradora Hondurena, S.A., – So.2d -, 2006 WL 1999368 (Fla. 3rd DCA July 19, 2006) (slip opinion). Carlton Fields represented Banco Ficohsa in the appeal of this case.
UK – broker may assert lien for unpaid reinsurance premium
Under UK law, a reinsurance broker may assert a lien over claim proceeds for premiums for reinsurance coverage paid by the party's broker, but not reimbursed by the reinsured. Heath Lambert Ltd. v. Sociedad de Corretaje de Seguros, [2006] EWHC 1345 (June 9, 2006).
Judge finds ambiguity as to whether two reinsurance agreements provide for a single or an annual aggregate limit
Cross motions for summary judgment were denied in Professional Consultants Insurance Co. v. Employers Reinsurance Co., Case No. 1:03-cv-216 (D. Vt. March 28, 2006), where the Court found that two reinsurance agreements covering professional liability policies were ambiguous as to whether the reinsurance provided an aggregate annual, or a per-policy, limit on the liability of the reinsurer. This case settled and was dismissed in June 2006. Professional Consultants Insurance Company v. Employers Reinsurance Company, 2006 WL 751244 (D. Vt. March 8, 2006) (slip opinion).